Follow the data: does a legal document link Brexit campaigns to US billionaire?

We reveal how a confidential legal agreement is at the heart of a web connecting Robert Mercer to Britains EU referendum

On 18 November 2015, the British press gathered in a hall in Westminster to witness the official launch of Leave.EU. Nigel Farage, the campaigns figurehead, was banished to the back of the room and instead an American political strategist, Gerry Gunster, took centre stage and explained its strategy. The one thing that I know is data, he said. Numbers do not lie. Im going to follow the data.

Eighteen months on, its this same insight to follow the data that is the key to unlocking what really happened behind the scenes of the Leave campaign. On the surface, the two main campaigns, Leave.EU and Vote Leave, hated one other. Their leading lights, Farage and Boris Johnson, were sworn enemies for the duration of the referendum. The two campaigns bitterly refused even to share a platform.

But the Observer has seen a confidential document that provides clear evidence of a link between the two campaigns. More precisely, evidence of a close working relationship between the two data analytics firms employed by the campaigns AggregateIQ, which Vote Leave hired, and Cambridge Analytica, retained by Leave.EU.

This is a deeply complex story. It has taken three months of investigation to unravel the web of connections both human and contractual. But these connections and threads linking two separate foreign data analytics companies one based in Canada and one based in London raise profound and troubling questions about our democratic process. Because these intricate links lead, in not many steps, to Robert Mercer.

This ordinary-looking document is at the heart of a web of relationships that link Mercer with the referendum to take Britain out of the EU. What impact did Mercer have on Brexit? Did the campaigns know of the link? Did they deliberately conceal it? Or could they, too, have been in the dark?

Because, legally, these two companies AggregateIQ in Canada and Cambridge Analytica, an American company based in London, have nothing to connect them publicly. But this intellectual property licence shown to the Observer tells a different story. This created a binding exclusive worldwide agreement in perpetuity for all of AggregateIQs intellectual property to be used by SCL Elections (a British firm that created Cambridge Analytica with Mercer).

The companies may have had different owners but they were legally bound together. And, the Observer has learned, they were working together on a daily basis at the time of the referendum both companies were being paid by Mercer-funded organisations to work on Ted Cruzs presidential campaign in America. What is more, several anonymous sources reveal the two companies, working on two separate British Leave campaigns, actually shared the same database at the time.

Follow the data, however, and another story is revealed, which leads directly to Mercer and his close associate, Steve Bannon, now Donald Trumps chief strategist in the White House. Mercer was the owner of Cambridge Analytica, a firm which, as the Observer detailed last week, was spun out of a British firm with 30 years experience in working for governments and militaries around the world, specialising in psychological operations. At the time of the referendum, the Observer has learned, Bannon was the head of it.

What was not known, until February, was the relationship between all these figures and the Leave campaign. That was when Andy Wigmore, Leave.EUs communications director, revealed to this paper that Farage was a close friend of both Bannon and Mercer. He said that the Leave campaign was a petri dish for the Trump campaign. We shared a lot of information because what they were trying to do and what we were trying to do had massive parallels.

Wigmore also said that Mercer had been happy to help and Cambridge Analytica had given its services to the campaign for free. It was the general secretary of Ukip, a British lawyer called Matthew Richardson, who effected Leave.eus introduction to Cambridge Analytica, Wigmore said. We had a guy called Matthew Richardson whod known Nigel for a long time and hes always looked after the Mercers. The Mercers had said that heres this company that we think might be useful.

But the contents of this document raise even more significant and urgent questions. Coordination between campaigns destroys the level playing field on which UK electoral law is based. It creates an unfair advantage.

Millar said that one of the significant and revealing aspects of the arrangement was that it was hidden. Its the covert nature of the relationship between these two companies and campaigns that I find particularly revealing and alarming. If there is covert cooperation via offshore entities, [it] is about as serious a breach of the funding rules as one can imagine in the 21st century.

Millar said that this case was without precedent. To have a billionaire so directly buying influence in a British election is absolutely unheard of. This is completely out of the ordinary. And whats clear is that our electoral laws are hopelessly inadequate. The only way we would be able to find the truth of what happened is through a public inquiry.

The link between Cambridge Analytica and AggregateIQ was never supposed to come to light. And it is still uncertain how Vote Leave came to work with AggregateIQ. There are several major Tory donors and pro-Brexit figures associated with Cambridge Analytica and SCL Elections, including Lord Marland, former treasurer of the Conservative party and head of the Commonwealth Enterprise and Investment Council. The pro-Brexit Tory donor Roger Gabb, the owner of South African wine company Kumala, is also a shareholder and was involved in one of the Leave campaigns. In a separate incident he was fined 1,000 by the Electoral Commission for failing to include imprints or campaign branding on newspaper ads.

The Observer revealed last week that two core members of the Vote Leave team used to work with both Cambridge Analytica and AggregateIQ. Cummings said that he found the company on which he spent by far the biggest chunk of his campaign budget on the internet.

He declined the opportunity to comment for this article. On Twitter, he accused the Observer of bad journalism and said the story was an embarrassment to a national paper but he did not comment further on how he found AggregateIQ, a firm with fewer than 10 employees based on an island off the west coast of Canada, on LinkedIn. Or if he knew of its relationship to Cambridge Analytica and Mercer. Though he has been a keen follower of Mercers dealings, tweeting several times about his company, Renaissance Technologies, which he describes as the worlds most successful quant fund [a hedge fund that uses automated trading].

A now deleted post on Leave.EUs website (but available via archive), entitled The Science Behind Our Strategy, details how Leave.EU was working with Cambridge Analytica, whose psychographic methodology is on another level of sophistication.

Leave EU campaign screenshot Photograph: Twitter

In November, Kaiser told Bloomberg the first stage of the work involved interviewing close to half a million Britons. To put this in context, typical polling samples conducted by firms such as YouGov are of about 1,200 people. Research on this scale and magnitude would cost hundreds of thousands of pounds, say experts though nothing has been declared or accounted for by any campaign. Any donation of services by Cambridge Analytica or Mercer would be impermissible under UK law.

In February 2016, Cambridge Analyticas CEO, Alexander Nix, told Campaign magazine: Recently, Cambridge Analytica has teamed up with Leave.EU the UKs largest group advocating for a British exit (or Brexit) from the European Union to help them better understand and communicate with UK voters. We have already helped supercharge Leave.EUs social media campaign by ensuring the right messages are getting to the right voters online and the campaigns Facebook page is growing in support to the tune of about 3,000 people per day.

On 2 February, Banks tweeted: Our campaign is being run by Gerry Gunster (won 24 referendum in the USA and Cambridge analytica experts in SM. (This post has since been deleted, though screenshots exist.)

In March 2016, Kaiser gave an interviewer further details: Well, actually right now we are working on the Brexit campaign so we are working with all three of the main parties. [] Its a very exciting campaign because it has forced the British government to run their third ever national referendum.

Other outlets found discrepancies. Buzzfeed published a story about how Vote Leave had given a 23-year-old fashion student, Darren Grimes, a gift of 625,000 in the week before the election, which was spent on the BeLeave social media campaign as well as a further 50,000 from another third party donor. Vote Leave and Grimes both claimed there was no coordination between campaigns. Grimes, the Observer has learned, had previously worked with Chris Wylie, a Canadian political strategist, who introduced AggregateIQ to Cambridge Analytica.

The returns showed that Vote Leave donated a further 100,000 to Veterans for Britain which then spent exactly that amount of money with AggregateIQ. Both campaigns denied any coordination. Nor was there coordination, Vote Leave said, with the Democratic Unionist Party, which spent a further 32,750 with AggregateIQ.

Leaked emails published in February last year appeared to reveal a plan to break spending laws by creating different campaigns and covertly coordinating them. Steve Baker, Conservative MP for Wycombe, wrote to colleagues: It is open to the Vote Leave family to create separate legal entities each of which could spend 700k: Vote Leave will be able to spend as much money as is necessary to win the referendum.

But if coordination did occur, it is unclear which parties knew what. A spokesman for Veterans for Britain told the Observer that AggregateIQ approached it. I didnt find AggregateIQ. They found us. They rang us up and pitched us.

However lawyers for Cambridge Analytica say that neither it nor SCL Elections has had any contractual or other link with AggregateIQ for 12 months, when it was retained to provide some software development and digital marketing support. They add that neither SCL Elections nor Cambridge Analytica was involved in AggregateIQs alleged involvement in the Vote Leave campaign.

A number of individuals, including Stephen Kinnock, MP for Aberavon, have sent a file of evidence to the Electoral Commission, the Committee on Standards in Public Life, the Crown Prosecution Service and the Metropolitan police pointing out a catalogue of issues. They all referred it back to the Electoral Commission, saying it was the body with jurisdiction over the matter.

The commission announced it was going to pursue an investigation of Leave.EU. Publicly, it has made no statement about Vote Leave. Sources have told the Observer that it is unable to pursue a proper investigation because AggregateIQ is outside British jurisdiction. The Observer has learned that the Information Commissioners Office is actively investigating BeLeave, Vote Leave, Veterans for Britain and the DUP for potential offences, including illegal sharing of data, but it is believed to have the same problem: the evidence is offshore.

Kinnock said: Its clear the Electoral Commission, the body which is meant to uphold it, is completely toothless Thats the heart of the problem. Even if it finds a problem, it can only impose a fine which is just the cost of doing business. Theres clear evidence of channelling funding through third parties, including DUP and BeLeave as front organisations to circumvent the rules. And there is no way of properly holding anyone to account. What youve shown is that there is a much bigger story here that I believe needs a full public inquiry. There are so many issues. Thousands of pounds of work apparently unaccounted for. Evidence of coordination between multiple campaigns. Multiple breaches of data protection. And this question of foreign influence, of a foreign billionaire buying influence in a British election, goes right to the heart of our entire democratic process.

The Observer asked Cambridge Analytica for comment on the financial and business links between Cambridge Analytica, Mercer, Bannon, AggregateIQ, Leave.EU and the Vote Leave campaigns. We asked about an apparently coordinated campaign strategy between Leave.EU, Vote Leave, BeLeave, Veterans for Britain and the DUP in part funded and enabled by Robert Mercer.

A Cambridge Analytica spokesman said: Cambridge Analytica did no paid or unpaid work for Leave.EU.

Lawyers for Cambridge Analytica and SCL Elections wrote to the Observer on Saturday to complain about our previous stories, which they said contained significant inaccuracies and amounted to a sustained campaign of vilification designed to paint a false and misleading picture of their clients. They said we were conducting a concerted campaign to undermine their clients and cause them damage. They said their clients have done no wrong, broken no laws and breached no ones rights and had not been part of a shadowy or unlawful campaign to subvert British democracy or dupe the British public.